A new era in food delivery is emerging, Rabobank report

Posted by AFN Staff Writers on 31st August 2016
Cycle

A new era in food delivery is rapidly emerging says a new report from Rabobank.

According to the ‘Food Delivery 2.0’ report, the idea of browsing the supermarket is increasingly irrelevant to some shoppers when food can be delivered with only a few clicks on a smartphone.

Rabobank analysts, Nicolas Fereday and Paula Savanti, say this new style of delivery is still in its early days but believe the rise of the on-demand economy will have a profound effect on the food industry.

“We dub this ‘Food Delivery 2.0,'”, said Fereday.

“As technology lowers the barriers to entry, it threatens to disrupt both food retail and traditional take-out food service. These new services satisfy our increasing desire for convenience, mass personalisation, and our preference for managing more of our lives online,” he said.

Due to this interest in convenient food options, Savanti says competition for the consumer dollar in this space has never been greater.

“Last year, the amount we spent at restaurants and other food service venues exceeded our grocery shopping bills for the first time—a major milestone,” she said.

 

The top five key elements driving the surge in food delivery

Rabobank has identified five key elements driving the surge in food delivery:

  1. At your convenience: Ultimately, this is a story of convenience. Saving time for consumers and making their lives a little easier by removing the headache of what to eat tonight.
  2. Focus on food, not just the tech: The future is about food and logistics. The pricing and quality of products will be key in determining the winners in the ready meal and grocery space.
  3. Getting the last mile right: Getting the logistics right—with ever-shrinking delivery times—is vital in making or breaking a business. Having a cool app, or other technology, is not enough, as it does not diminish the age-old dilemma of getting the product from A to B as quickly as possible.
  4. Expect some shake-out: A lot of money is flowing into the sector. But who will survive? Despite stratospheric valuations, many of these companies are struggling to make a sufficient return or profit.
  5. A hot topic, but not total meltdown: Food Delivery 2.0 will not lead to a total displacement of existing players, but we do see a long-term future for these new platforms to complement the existing routes to the consumer.